The Aotearoa New Zealand Association of Social Workers (ANZASW) notes the release of the government’s response to the Tax Working Group (TWG) report this week.
The Association appreciates the government’s willingness to explore the issue of fairer taxation as part of the review it commissioned. As we have stated before, we strongly believe that progressive taxation can play an important role in reducing the high levels of social and economic inequity in this country.
As the latest release of figures on child poverty by Statistics New Zealand demonstrated, issues like housing and the cost of living crisis continue to measurably impact urgent social challenges. Fairer taxation can be used to direct more resources toward tackling these very serious problems.
With the above in mind, ANZASW is pleased to see the government’s stated willingness to crack down on tax avoidance, especially by big multinationals, in its response to the Working Group report.
ANZASW commends the government for considering targeted action on land banking. However, we are disappointed that no significant taxes will be introduced in order to protect the environment, so as to induce a reduction of carbon emissions in certain sectors.
We also regret that some form of Capital Gains Tax (CGT)- for example, one that targets short-term speculators, particularly those that “flip” homes- was not adopted as policy by government, despite the Prime Minister’s statements in support of CGT in the past.
The Association reiterates its view, as expressed in a previous statement on taxation this year, that we wish to see inequality reduced, and that fairer tax rules can contribute to this goal. However, we believe that this should be done in a balanced and calibrated way that is not harmful to groups like small business owners and/or those on lower incomes.
With the wholesale rejection of the TWG’s Capital Gains Tax proposals, there are currently no indications that accompanying plans to raise income tax thresholds will be implemented. ANZASW in principle supports tax relief for those in lower wealth deciles. Regardless of whether CGT is introduced or not, there remains a need to review tax thresholds in order to make the system as a whole fairer.
We look forward to the release of a refreshed tax policy work programme in due course.